1 / 9

FIN 390 WEEK 6 QUIZ DEVRY

https://www.coursetutor.us/product/fin-390-week-6-quiz-devry/<br><br><br>FIN 390 WEEK 6 QUIZ DEVRY<br>Question 15 pts<br>(TCO 7) What is the primary risk that a bondholder faces?<br>

coursetutorus
Download Presentation

FIN 390 WEEK 6 QUIZ DEVRY

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. FIN 390 WEEK 6 QUIZ DEVRY https://www.coursetutor.us/product/fin-390-week-6-quiz-devry/ Or Email us on help@coursetutor.us FIN 390 WEEK 6 QUIZ DEVRY Question 15 pts (TCO 7) What is the primary risk that a bondholder faces? Risk of the issuing firm declaring bankruptcy A downturn in the economy causing the firm to lose money Interest rate risk

  2. None of the above Question 25 pts (TCO 7) To calculate a bond’s duration, you must average the present values of all the coupon payments. take a weighted average of the present values of all the cash inflows. divide the face value by the PV of the coupon annuity. None of the above Question 35 pts (TCO 7) Cash flow matching isn’t the ideal solution to reduce bond portfolio interest rate risk because

  3. some firms can’t afford to buy the extra zero- coupon bonds. the Federal Reserve may raise interest rates beyond the coupon rate. this strategy puts constraints on the bonds that the investor may wish to buy. None of the above Question 45 pts (TCO 7) Why do investors like convexity? Because the potential price drop is greater than price gain when yields rise Because the bonds displaying it are usually priced at a premium

  4. Because they have more potential upside than potential downside None of the above Question 55 pts (TCO 7) Passive bond managers prefer to manage the prices of the bonds in their portfolios. manage only the interest rate risk of their fixed- income securities. Both of the above None of the above Question 65 pts (TCO 9) Which of the following possible provisions of a bond indenture is designed to ease the burden of principal repayment by spreading it out over several years?

  5. Callable feature Convertible feature Subordination clause Sinking fund Question 75 pts (TCO 9) Bonds issued in the United States are _____, and most bonds issued overseas are bearer bonds; registered. Registered bonds; bearer bonds. the covariance of the risk-free rate; the rate of inflation.

  6. None of the above Question 85 pts (TCO 9) A convertible bond has a par value of $1,000 but its current market price is $950. The current price of the issuing company’s stock is $19, and the conversion ratio is 40 shares. The bond’s conversion premium is $50.00. $190.00. $200.00. $240.00. Question 95 pts (TCO 7) Bond portfolio immunization techniques balance _____ and _____ risk. price; reinvestment

  7. price; liquidity credit; reinvestment credit; liquidity Question 105 pts (TCO 5) A perpetuity pays $100 each and every year forever. The duration of this perpetuity will be _____ if its yield is 9%. 7 9 9.39 12.11 Question 115 pts

  8. (TCO 7) A company has current assets of: cash $500, accounts receivable $200, and inventory $400. The company also has current liabilities of: accounts payable $300 and notes payable $600. What is the company’s quick ratio? .78 .88 .90 .55 Question 125 pts (TCO 7) You earn 6% on your corporate bond portfolio this year, and you are in a 25% federal tax bracket and an 8% state tax bracket. Your after tax return is _____. (Assume that federal taxes are not deductible against state taxes and vice versa.) 4.5% 4.14%

  9. 4.02% 3.12% Download Now

More Related